Okay, I’m gonna level with ya. That there descending channel ain’t exactly new, since we played it back on March 29. Back then, the pair was bouncing from 111.20, so I told y’all to make sure to put the pair on your watchlist and be ready to start lookin’ for opportunities to go short once the pair does reach the channel’s resistance area.
Well, check that out, dawg. As y’all can see, the pair made it’s way to the channel’s resistance area before plunging lower for about 130 pips. Aww, yea! Anyhow, the pair is currently testing the channel’s support area again, this time at 110.20. Y’all may therefore wanna put the pair on your watchlist again.
And for the gangsta traders out there, y’all may even wanna start lookin’ for opportunities to go long while gunning for the pair’s resistance area. After all, stochastic is already moving back up after visiting the oversold area. Moreover, 110.20 is a price area with very significant market interest, even on the higher time frames. Y’all can see it if you switch to a 4-hour chart, or scroll back on the 1-hour chart. Going long here is a counter-trend play, though, so more conservative traders may wanna sit tight and wait for a pullback to the channel’s resistance area instead. And as usual, just make sure to practice proper risk management, a’ight?
I’ve got something real fresh for USD/JPY. In fact, the chart pattern hasn’t even fully formed yet. As y’all can see on that there chart, USD/JPY encountered buyers at 110.30 and got rejected. As a result, the pair reeled all the way back to the major psychological level at 112.00.
Even so, them bears ain’t ready to give up just yet, so they attacked again. However, bulls have apparently entrenched themselves at 110.30, since the price level appears to be acting as support again, blunting the bearish assault. If 110.30 does hold as support and begins climbing back up again, then we would get us a double bottom pattern, which is a bullish chart pattern. The pair needs to smash past 112.00 before the double bottom is confirmed, though.
Looking at our technical indicators, chances are good that 110.30 may hold as support, since stochastic is already moving back up again. Them moving averages, meanwhile, are already in uptrend mode.
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To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.